IBM vs. MSFT: IBM vs. Microsoft Stock Comparison

July 2, 2026

How do IBM (IBM) and Microsoft (MSFT) stack up? This page sets them side by side across company profile, performance and risk, profitability, growth, financial strength, dividends, and valuation, with selected fundamentals also measured against each stock's industry-group peers.

Company Profile

IBM (IBM) and Microsoft (MSFT) both fall under the Software & Services industry group, but IBM is classified in IT Services while MSFT is classified in Software.

Company profile comparison for IBM (IBM) and Microsoft (MSFT)
Profile Item	IBM	MSFT
Name	International Business Machines Corporation	Microsoft Corp.
Country/Region	United States	United States
GICS Sector	Information Technology	Information Technology
GICS Industry Group	Software & Services	Software & Services
GICS Industry	IT Services	Software
GICS Sub-Industry	IT Consulting & Other Services	Systems Software
Market Capitalization	264.31 billion USD	2,770.95 billion USD
Currency	USD	USD
Exchange	NYSE	Nasdaq
Listing Date	January 2, 1962	March 13, 1986
Security Type	Common Stock	Common Stock

Price Performance

Cumulative Growth

IBM

MSFT

IBM (IBM) vs. Microsoft (MSFT): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

Loading price history…

Trailing total returns for IBM (IBM) and Microsoft (MSFT). Returns over one year are annualized.

Performance Metrics

Price performance metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
Total Return (1Y)	-2.16%	-24.41%

Risk Profile

Drawdown History

IBM

MSFT

IBM (IBM) vs. Microsoft (MSFT): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Risk Metrics

Risk profile metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
Volatility (1Y, Annualized)	40.54%	26.96%
Beta (5Y)	0.68	1.13
Avg. Volume (3M)	8.55M	39.43M

Risk-Adjusted Performance

Risk-Return Positioning

IBM and MSFT are plotted by 1-year volatility (risk) and 1-year return. The dashed Capital Allocation Line runs from the risk-free rate through the shared industry median.

Profitability

ROE (TTM)

Both IBM (IBM) at 35.77% and Microsoft (MSFT) at 34.01% sit in the top peer quartile for ROE, suggesting each generates more profit from shareholders’ equity than typical industry peers.

IBM

Software & Services industry group

35.77%

Max: 53.38%
IBM: 35.77%
Q3: 16.53%
Median: 5.38%
Q1: -13.43%
Min: -55.27%

MSFT

Software & Services industry group

34.01%

Max: 53.38%
MSFT: 34.01%
Q3: 16.53%
Median: 5.38%
Q1: -13.43%
Min: -55.27%

IBM (IBM) vs. Microsoft (MSFT): A comparison of their ROE against the Software & Services industry group benchmark.

Net Margin (TTM)

For every dollar of sales, both IBM (IBM) at 15.61% and Microsoft (MSFT) at 39.34% retain more as net profit than most peers, landing in the top net margin quartile of their industries.

IBM

Software & Services industry group

15.61%

Max: 44.20%
IBM: 15.61%
Q3: 14.93%
Median: 3.32%
Q1: -5.99%
Min: -34.99%

MSFT

Software & Services industry group

39.34%

Max: 44.20%
MSFT: 39.34%
Q3: 14.93%
Median: 3.32%
Q1: -5.99%
Min: -34.99%

IBM (IBM) vs. Microsoft (MSFT): A comparison of their net margin against the Software & Services industry group benchmark.

Operating Margin (TTM)

Microsoft (MSFT) at 46.33% operates in the top operating margin quartile, ahead of IBM (IBM) at 13.81%, which runs around its industry’s norm.

IBM

Software & Services industry group

13.81%

Max: 60.45%
Q3: 16.49%
IBM: 13.81%
Median: 4.46%
Q1: -12.92%
Min: -53.94%

MSFT

Software & Services industry group

46.33%

Max: 60.45%
MSFT: 46.33%
Q3: 16.49%
Median: 4.46%
Q1: -12.92%
Min: -53.94%

IBM (IBM) vs. Microsoft (MSFT): A comparison of their operating margin against the Software & Services industry group benchmark.

Profitability Metrics

Profitability metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
ROE (TTM)	35.77%	34.01%
ROA (TTM)	5.37%	14.81%
Net Margin (TTM)	15.61%	39.34%
Operating Margin (TTM)	13.81%	46.33%
Gross Margin (TTM)	58.36%	68.31%

Growth

Revenue Growth

IBM (IBM) vs. Microsoft (MSFT): A comparison of their Revenue Growth across different time periods.

Revenue Growth Metrics

Revenue growth metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
Revenue Growth (YoY)	7.62%	14.93%
Revenue Growth (3Y CAGR)	3.72%	12.42%

EPS Growth

IBM (IBM) vs. Microsoft (MSFT): A comparison of their EPS Growth across different time periods.

EPS Growth Metrics

EPS growth metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
EPS Growth (YoY)	73.72%	15.59%
EPS Growth (3Y CAGR)	83.76%	12.23%

Financial Strength

Current Ratio (MRQ)

Microsoft (MSFT) at 1.28 keeps current ratio within its industry’s typical mid-range, while IBM (IBM) at 0.80 runs in the tighter-liquidity quartile — a thinner cushion against current liabilities for IBM.

IBM

Software & Services industry group

0.80

Max: 5.55
Q3: 2.88
Median: 1.72
Q1: 1.07
IBM: 0.80
Min: 0.03

MSFT

Software & Services industry group

1.28

Max: 5.55
Q3: 2.88
Median: 1.72
MSFT: 1.28
Q1: 1.07
Min: 0.03

IBM (IBM) vs. Microsoft (MSFT): A comparison of their current ratio against the Software & Services industry group benchmark.

Debt / Equity (MRQ)

Microsoft (MSFT) at 0.30 carries an industry-typical debt-to-equity mix, while IBM (IBM) at 2.11 uses more debt funding than most peers.

IBM

Software & Services industry group

2.11

Max: 2.31
IBM: 2.11
Q3: 1.06
Median: 0.32
Q1: 0.06
Min: 0.00

MSFT

Software & Services industry group

0.30

Max: 2.31
Q3: 1.06
Median: 0.32
MSFT: 0.30
Q1: 0.06
Min: 0.00

IBM (IBM) vs. Microsoft (MSFT): A comparison of their debt-to-equity ratio against the Software & Services industry group benchmark.

Financial Strength Metrics

Financial strength metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
Current Ratio (MRQ)	0.80	1.28
Debt / Equity (MRQ)	2.11	0.30
Net Debt / EBITDA	3.49	0.26

Dividends

Dividend Yield (TTM)

Both IBM (IBM) at 2.42% and Microsoft (MSFT) at 0.97% yield above their industries’ entire benchmark ranges — high enough that dividend safety, not income, becomes the first question.

IBM

Software & Services industry group

2.42%

IBM: 2.42%
Max: 0.00%
Q3: 0.00%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

MSFT

Software & Services industry group

0.97%

MSFT: 0.97%
Max: 0.00%
Q3: 0.00%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

IBM (IBM) vs. Microsoft (MSFT): A comparison of their dividend yield against the Software & Services industry group benchmark.

Dividend Payout Ratio (TTM)

Both IBM (IBM) at 59.47% and Microsoft (MSFT) at 20.73% pay out more of their earnings than any of their industry peers — the thinnest cover in their groups, so dividend headroom deserves attention.

IBM

Software & Services industry group

59.47%

IBM: 59.47%
Max: 0.00%
Q3: 0.00%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

MSFT

Software & Services industry group

20.73%

MSFT: 20.73%
Max: 0.00%
Q3: 0.00%
Median: 0.00%
Q1: 0.00%
Min: 0.00%

IBM (IBM) vs. Microsoft (MSFT): A comparison of their payout ratio against the Software & Services industry group benchmark.

Dividend Metrics

Dividend metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
Dividend Yield (TTM)	2.42%	0.97%
Dividend Payout Ratio (TTM)	59.47%	20.73%

Valuation

P/E Ratio (TTM)

Both IBM (IBM) at 24.89 and Microsoft (MSFT) at 22.19 land around their industries’ usual P/E ratio levels — neither is getting a clear earnings-multiple discount or premium versus peers.

IBM

Software & Services industry group

24.89

Max: 126.50
Q3: 60.82
Median: 30.49
IBM: 24.89
Q1: 16.22
Min: 0.41

MSFT

Software & Services industry group

22.19

Max: 126.50
Q3: 60.82
Median: 30.49
MSFT: 22.19
Q1: 16.22
Min: 0.41

IBM (IBM) vs. Microsoft (MSFT): A comparison of their P/E ratio against the Software & Services industry group benchmark.

P/S Ratio (TTM)

On P/S ratio, both IBM (IBM) at 3.84 and Microsoft (MSFT) at 8.71 are priced roughly in line with their industries — neither looks cheap nor rich on a sales basis.

IBM

Software & Services industry group

3.84

Max: 18.72
Q3: 8.93
Median: 4.21
IBM: 3.84
Q1: 2.14
Min: 0.02

MSFT

Software & Services industry group

8.71

Max: 18.72
Q3: 8.93
MSFT: 8.71
Median: 4.21
Q1: 2.14
Min: 0.02

IBM (IBM) vs. Microsoft (MSFT): A comparison of their P/S ratio against the Software & Services industry group benchmark.

P/B Ratio (MRQ)

On P/B ratio, both IBM (IBM) at 8.02 and Microsoft (MSFT) at 6.69 are valued close to their industries’ norm against book — neither stands out from peers.

IBM

Software & Services industry group

8.02

Max: 18.46
Q3: 8.62
IBM: 8.02
Median: 4.00
Q1: 1.94
Min: -7.57

MSFT

Software & Services industry group

6.69

Max: 18.46
Q3: 8.62
MSFT: 6.69
Median: 4.00
Q1: 1.94
Min: -7.57

IBM (IBM) vs. Microsoft (MSFT): A comparison of their P/B ratio against the Software & Services industry group benchmark.

Valuation Metrics

Valuation metrics for IBM (IBM) and Microsoft (MSFT)
Metric	IBM	MSFT
P/E Ratio (TTM)	24.89	22.19
P/S Ratio (TTM)	3.84	8.71
P/B Ratio (MRQ)	8.02	6.69
Free Cash Flow Yield (TTM)	4.95%	1.34%